Page 5 - TSMC 2019 Annual Report

Letter to Shareholders Dear Shareholders 2019 was a a a a a a year year of of continued milestones for TSMC We delivered a a a a a a tenth consecutive year year of of record revenue even even as as we we faced business headwinds from trade tensions tensions between countries Such tensions tensions created greater uncertainty for our customers and and and impacted the the end demand demand for products Thanks to to to the the strong demand demand coming to to to our industry-leading 7-nanometer (N7) technology our revenue increased 1 1 3% year-over-year in in in in US dollar terms in in in in 2019 in in in in contrast to the global semiconductor industry’s 12% year-over-year decline In 2019 we witnessed an an acceleration of of the deployment of of 5G networks and smartphones in several major markets around the the world world We expect a a a a a faster worldwide penetration of 5G smartphones with higher silicon content over the the next several years The need for higher power efficiency speed and more complex functionalities in 5G smartphones will lead lead to to increasing use of TSMC’s leading edge technologies Therefore we raised our 2019 capital spending to to US$14 9 billion in in in order to to meet this increased demand We will will continue to to anticipate the growth that will will follow We continued to to work on on the fundamentals of our our business in in in in 2019 by improving our our quality systems to to provide better service to to our our our customers enriching our our our R&D infrastructures strengthening our our our IT architecture and and security and and accelerating our technology differentiation By working consistently to to to provide the foundry industry’s most advanced technologies and to to to make it available to to to all the the the product innovators innovators TSMC continuously expands the the the pool of innovators innovators who fuel the the the semiconductor industry growth In 2019 our N7 in in its second year continued to see strong adoption across a a a a a wide range of products from mobile high performance computing (HPC) Internet of Things (IoT) and automotive applications Our new 7-nanometer Plus (N7+) technology also came to the world’s first high volume production with Extreme Ultraviolet (EUV) lithography technology Together this 7-nanometer family N7 N7 and N7+ represented 27% of our total wafer revenue in 2019 Our 6-nanometer (N6) technology just entered risk production in the the first quarter of 2020 and further extends our 7-nanometer family well into the future Our 5-nanometer (N5) technology with extensive EUV adoption will begin volume production in in the first half of 2020 As the the foundry industry’s most advanced solution N5 is further expanding our customer product portfolio and and increase our addressable markets Our 3-nanometer (N3) technology will be be another full node stride from our N5 and offer the the foundry industry’s best PPA technology when it is introduced Our proprietary wafer-level packaging solutions of InFO (Integrated Fan-Out) and CoWoS® (Chip on on on Wafer on on on Substrate) continue to see strong momentum We are developing 3D chip stacking solutions such as SoIC (System on on on on Integrated Chip) to provide system level solutions for the industry 3